In his latest defense of JPMorgan Chase's size and scope, Chief Executive Jamie Dimon said Tuesday that small banks depend on megabanks for a slew of financial services.
The comments come amid renewed calls to break up the nation's largest banks. They also provide the latest twist in an ongoing clash between the industry's biggest and smallest players.
Asked to justify his company's $2.4 trillion-asset size, Dimon sent a clear message to his smaller peers: You depend on us, he said.
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Mounting yet another defense of JPMorgan Chases size and scope, Chairman and CEO Jamie Dimon pointed out the fallibility of smaller banks in his annual letter to shareholders.
April 8 -
In what could be seen as a Nixon-to-China moment, Minneapolis Fed President Neel Kashkari, a former Goldman Sachs executive and one of the architects of Treasury's bailout of the largest banks, said that breaking up the big banks and turning them into public utilities may be the only way to solve "too big to fail."
February 16 -
Busting up JPMorgan Chase would result in a collection of financial services companies with higher back-office costs, more divided capital and less power to be a world leader, the company's CFO said Tuesday.
February 24
JPMorgan is the "largest bank to some of the smaller banks," Dimon said, describing a need in the industry for a "big, strong American bank."
Dimon rattled off a long list of services that JPMorgan provides to community and regional banks, including M&A, foreign exchange and access to secondary mortgage markets.
"A lot of times we do things that other banks won't do," he said.
Dimon made the comments during an investor presentation at the company's New York headquarters.
His latest defense of megabanking comes just days after Neel Kashkari, the new president of the Federal Reserve Bank of Minneapolis,
"I believe the biggest banks are still 'too big to fail' and continue to pose a significant, ongoing risk to our economy," Kashkari said in a Feb. 16 speech in Washington.
Kashkari's call for reform echoed the rhetoric of several key Democratic policymakers, including presidential candidate Bernie Sanders, who has made reforming Wall Street a central tenant of his campaign.
During Dimon's speech, he told a story about how he recently called up a regional bank executive who had publicly aired his grievances against JPMorgan and other big banks.
The regional bank CEO — whom Dimon did not name, but said he respects — had criticized big banks as risky. So Dimon pointed out all of the JPMorgan services that the regional bank relies on to turn a profit.
It's "kind of bank-on-bank violence to the larger banks," Dimon said,
In the past year, Dimon has made a point of criticizing his smaller peers. In
Still, as the $2.4 trillion-asset company faces renewed scrutiny, Dimon said the company has not always done the best job making the case to the public.
Discussing the benefits that JPMorgan provides to the economy as a whole, he said: "It's just harder to explain to your mother-in-law."
